Medicaid’s new anti-fraud program a welcome move

WE HAVEN’T heard a lot of the overheated rhetoric about Medicaid fraud since the economy picked up, and legislators found that they could pay for medical care for the poor without having to consider that unspeakable option of raising cigarette taxes.

But the facts are that our cigarette taxes still need to be raised, in order to discourage teen smoking, our Medicaid program will continue to demand a larger and larger share of state revenues until this country comes to terms with medical costs, and we always need to be looking for cost-effective ways to eliminate fraud and waste, in Medicaid or any other program, public or private.

So we were happy to learn that the state Health and Human Services Department has purchased a new computer program that analyzes billing patterns to root out fraud and abuse in Medicaid claims.

The program, which is used in 17 other states, has already spotted speech therapists who claimed to treat more than 50 patients a day, psychiatrists who billed for more than 24 hours worth of treatment in a day and ambulances that charged for ferrying patients who never received medical care. It has also detected indications of doctor and pharmacy shopping for OxyContin and other controlled substances.

And officials say the program can help the state spot ways to save money by spending money, such as the recent decision to cover colorectal cancer screenings for high-risk and older patients. As the department’s Jeff Stensland explained, “It seems now like a no-brainer, but until you crunch the numbers on it, you might not even realize it’s a cost-effective thing to do.”

The relational database program supplements a fraud-detection system that up until now relied mainly on the horse-and-buggy approach of taking individual complaints. That should address one of the biggest problems with fighting Medicaid fraud: It often costs more to detect the fraud than the fraud itself costs.

Medicaid fraud has never been widespread in South Carolina. At the peak of the political campaign to undermine the public confidence in the program, auditors estimated that less than one half of one percent of Medicaid payments were based on bogus claims.

The bigger problem with Medicaid is the same as the problem with private health insurance: The cost is skyrocketing because the cost of medical care is skyrocketing. If current trends continue, Medicaid spending is projected to jump from 20 percent of the state’s general spending today to 30 percent in 2015.

That means that we must always be willing to try reasonable ways to reduce or (more likely) slow the increase in costs, from finding patterns of abuse and encouraging preventive care to finding “medical homes” for patients and turning the emergency room back into an option of last resort, rather than first.

Oh, and the cigarette tax? We should raise that even if we burned the money, because for every 10 percent increase in the cost of cigarettes, there is a 7 percent to 10 percent decrease in the number of teen smokers — a decrease that will eventually lead to lower Medicaid costs, as those would-have-been smokers don’t become as sick as they otherwise would have. But of course burning the money would be stupid. Instead, we might consider using it as a down-payment on those additional Medicaid costs we’re going to be facing every year, even if our nifty new computer program eliminates every bit of fraud that is occurring.